Introduction
Charitable trusts, societies, NGOs and companies established for charitable
purposes may be eligible for income-tax exemption subject to the conditions
prescribed under the Income-tax law.
The earlier system of registration under Sections 12A and 12AA has been
replaced by the Section 12AB registration framework. Therefore, an old
article stating that a trust must simply obtain registration under Section
12A or Section 12AA is no longer sufficient.
For the Income-tax Act, 1961, the present framework is primarily contained
in Sections 11, 12, 12A and 12AB, together with the applicable Income-tax
Rules.
From 1 April 2026, the Income-tax Act, 2025 applies to tax years covered by
the new Act. However, the Income-tax Act, 1961 continues to be relevant for
earlier assessment years and transitional matters.
Is Registration Under Section 12AB Necessary?
Yes, generally.
A charitable or religious trust or institution seeking exemption under
Sections 11 and 12 of the Income-tax Act, 1961 is required to obtain
registration under the applicable provisions of Section 12AB.
The Income Tax Department specifically states that registration is mandatory
for a trust seeking exemption under Section 11.
Thus, merely having a charitable object is not enough.
A trust, society, NGO or Section 8 company must satisfy the applicable
registration and exemption requirements before claiming exemption under
Sections 11 and 12.
Section 12AB provides the statutory framework for registration of charitable
and religious trusts and institutions.
The Commissioner/Principal Commissioner examines the application and the
documents and information furnished by the applicant. Depending upon the
category of application, the registration may be provisional or regular.
The registration framework covers, among other situations:
new institutions seeking provisional registration;
conversion of provisional registration into regular registration;
existing institutions seeking regular registration;
renewal/re-registration;
registration following modification of objects; and
restoration or reactivation of registration in specified circumstances.
The application is made electronically in the prescribed form.
Form 10A and Form 10AB
The present procedure does not require every application to be filed in the
same form.
Under Rule 17A:
Form 10A
Form 10A is prescribed for specified applications under Section 12A,
including the relevant applications for provisional registration and certain
other specified cases.
Form 10AB
Form 10AB is prescribed for other categories, including applications for
conversion of provisional registration into regular registration and
specified applications relating to existing registration, renewal,
modification of objects and other circumstances covered by Section 12A.
The current Rule 17A expressly provides for Form 10A and Form 10AB according
to the particular clause of Section 12A under which the application is made.
Therefore, an applicant should first determine which clause of Section
12A(1)(ac) applies before selecting Form 10A or Form 10AB.
Who Can Apply for Section 12AB Registration?
The registration provisions can apply to various charitable or religious
entities, including:
charitable trusts;
religious trusts;
charitable societies;
NGOs;
Section 8 companies;
other institutions established for charitable or religious purposes.
A Section 8 company under the Companies Act, 2013 is the modern equivalent
of what older articles commonly called a "Section 25 company".
Registration as a Section 8 company does not automatically grant income-tax
exemption. If the company wants to claim exemption under Sections 11 and 12,
it must satisfy the applicable Income-tax Act requirements.
The Commissioner is required to examine the statutory requirements
applicable to the particular application.
Important matters include:
1. Charitable or Religious Objects
The objects of the trust or institution should fall within the statutory
concept of charitable or religious purpose.
The definition of charitable purpose includes, among other things:
relief of the poor;
education;
yoga;
medical relief;
preservation of environment;
preservation of monuments or places or objects of artistic or historic
interest; and
advancement of any other object of general public utility.
An organisation should therefore ensure that its constitutional documents
clearly and genuinely reflect its charitable or religious objectives.
2. Genuineness of Activities
The Commissioner may examine whether the activities of the trust or
institution are genuine and whether they are being carried out in accordance
with the conditions applicable to registration.
Section 12AB contains provisions concerning activities that are not genuine
or are not being carried out in accordance with the conditions subject to
which registration was granted.
3. Compliance with Other Laws
The registration provisions also contain requirements concerning compliance
with other applicable laws where such compliance is relevant to the objects
and activities of the institution.
Therefore, a charitable organisation should maintain proper records of its
statutory registrations, licences and approvals.
The documents depend upon the particular form and category of application.
Under the current Rule 17A framework, documents can include:
1. Trust deed or other constitutional document establishing the trust or
institution;
2. Registration certificate issued by the Registrar of Companies, Registrar
of Societies, Registrar of Public Trusts or other relevant authority;
3. Documents evidencing adoption or modification of objects, where
applicable;
4. FCRA registration certificate, where the applicant is registered under
the Foreign Contribution (Regulation) Act, 2010;
5. Existing registration orders under Sections 12A, 12AA or 12AB, where
applicable;
6. Earlier rejection orders, if any;
7. Annual accounts for relevant preceding years where the institution has
already been in existence;
8. Note on activities of the trust or institution;
9. Other documents and information specifically required by Form 10A or Form
10AB.
The current rules expressly prescribe these categories of supporting
documents.
A newly created trust or institution should ordinarily keep the following
documents ready:
registered trust deed or constitutional document;
registration certificate, wherever applicable;
PAN of the trust/institution;
details of trustees or governing body;
details of founders/authors;
objects of the institution;
address and contact details;
bank account details;
details of activities, if activities have commenced;
FCRA registration, if applicable; and
other information required in Form 10A.
The exact document list should be checked against the form applicable to the
particular application.
An existing organisation should additionally maintain:
audited financial statements/accounts;
income-tax returns;
details of donations and grants;
details of charitable activities;
expenditure details;
details of assets and liabilities;
previous registration orders;
details of amendments to objects;
details of trustees/directors/governing body;
FCRA documents, where applicable; and
other statutory registrations and approvals.
The Income Tax Department specifically requires annual accounts for relevant
preceding years, where applicable, and a note on the activities of the trust
or institution.
Step 1: Prepare the Constitutional Documents
The first step is to ensure that the trust deed, memorandum, articles or
other constitutional document properly states the charitable or religious
objects.
For a Section 8 company, the Memorandum and Articles of Association should
be examined to ensure that the objects and restrictions are consistent with
the proposed charitable activities.
Step 2: Obtain PAN and Other Basic Registrations
The organisation should have its PAN and the necessary basic registration
documents.
A society should have its registration certificate; a Section 8 company
should have its corporate registration documents; and a trust should have
its trust deed and applicable registration documents.
Step 3: Identify the Correct Section 12A Category
Before filing the application, determine whether the organisation should
apply:
in Form 10A; or
in Form 10AB.
This is important because the correct form depends upon the specific
statutory circumstances.
Step 4: Prepare the Application Electronically
The application is filed electronically in the prescribed form.
The applicant should enter the details of:
the organisation;
founders/authors;
trustees/directors;
objects;
registration details;
previous registration, if any;
activities;
accounts;
FCRA status, if applicable; and
other information required by the form.
Step 5: Upload Supporting Documents
The required documents should be uploaded in the prescribed electronic
format.
Particular attention should be paid to:
correct trust deed/constitutional document;
registration certificate;
accounts;
activity report;
previous registration orders;
object modification documents; and
FCRA certificate, where applicable.
Step 6: Verify the Application
The application must be verified in the prescribed manner by the person
authorised to verify the return of income or otherwise authorised under the
applicable provisions.
Incorrect or incomplete information should be avoided.
Step 7: Acknowledgement and Processing
After successful submission, the application is processed by the Income-tax
Department.
The competent authority may call for additional documents, information or
explanations where required.
The organisation should respond within the time specified in the notice.
Step 8: Examination by the Commissioner
The Commissioner/Principal Commissioner may examine:
the objects of the institution;
genuineness of activities;
compliance with statutory conditions;
documents and accounts;
activities actually carried out; and
other relevant information.
Section 12AB specifically empowers the Commissioner to call for documents or
information and make necessary inquiries in appropriate cases.
Step 9: Registration Order
If the statutory requirements are satisfied, the registration is granted.
The Department issues the applicable registration order/certificate and
Unique Registration Number (URN).
For Form 10A, the Department's current guidance refers to Form 10AC as the
order of registration/approval issued after successful processing.
Time Limit for Passing the Registration Order
The time limit depends upon the nature of the application and the applicable
statutory provision.
An important change was made with effect from 1 October 2024.
For specified Section 12AB proceedings, the time limit for passing an order
was changed from six months from the end of the month of receipt of the
application to six months from the end of the quarter in which the
application is received, as applicable under the amended law.
Therefore, the old statement that every Section 12A registration application
must be decided within six months from the end of the month of filing is no
longer an accurate description of the current law.
Provisional Registration
The present system recognises provisional registration for eligible new
trusts and institutions.
A new organisation that has not yet established sufficient activities may
apply under the applicable provisional-registration provisions.
After commencement of activities, the organisation must apply for regular
registration within the statutory time limit applicable to its case.
The Income Tax Department states that a trust or institution provisionally
registered under Section 12AB must apply for conversion into regular
registration in Form 10AB at least six months before expiry of the
provisional registration period or within six months of commencement of
activities, whichever is earlier. ([Etds][6])
This deadline is extremely important.
Example
Suppose a newly established charitable institution obtains provisional
registration and starts its charitable activities.
It should not assume that provisional registration automatically becomes
permanent.
It must file the prescribed application for regular registration within the
statutory period.
Failure to make the application within the applicable time can affect the
institution's registration and exemption claims.
Validity of Registration
The validity period depends upon the type of registration and the
circumstances of the institution.
A significant recent change concerns smaller trusts and institutions.
Where the total income of the trust or institution, computed before giving
effect to the exemption under the relevant provisions, does not exceed ₹5
crore in each of the two previous years preceding the year of application,
the validity of registration can be 10 years, subject to the statutory
conditions.
Therefore, the earlier general statement that Section 12 registration is
always valid for only five years is outdated.
Where the Commissioner is not satisfied that the statutory conditions are
fulfilled, the application may be rejected in accordance with the applicable
provisions after following the prescribed procedure.
The organisation should carefully examine the reasons for rejection.
Depending upon the nature of the order and the applicable law, an aggrieved
institution may have a statutory right of appeal before the appropriate
appellate authority.
Modification of Objects
A trust or institution that has already obtained registration cannot freely
change its objects without considering the consequences under Section
12A/12AB.
Where the objects are modified in circumstances covered by Section 12A, the
institution may be required to make a fresh application for registration in
the prescribed form within the statutory time limit.
Accordingly, before amending a trust deed, memorandum or other
constitutional document, the organisation should examine the effect of the
proposed amendment on its Section 12AB registration.
Can Registration be Cancelled?
Yes.
Registration can be cancelled in circumstances specified under Section 12AB.
For example, cancellation-related provisions can apply where:
activities are not genuine;
activities are not carried out in accordance with the conditions of
registration;
specified statutory violations occur;
other statutory conditions are breached; or
the application contains false or incorrect information in circumstances
covered by the law.
The current Section 12AB provisions expressly deal with non-genuine
activities, non-compliance with registration conditions and certain other
specified violations.
Therefore, obtaining registration is not the end of compliance. The
institution must continue to comply with the applicable conditions.
Is 12AB Registration the Same as 80G Approval?
No.
Section 12AB registration and Section 80G approval serve different purposes.
Section 12AB
Registration under Section 12AB is primarily relevant to claiming exemption
of eligible income under Sections 11 and 12.
Section 80G
Approval under Section 80G enables eligible donors to claim deduction for
qualifying donations, subject to the conditions of Section 80G.
Therefore, a charitable institution should separately examine whether it
requires 80G approval.
Is 12AB Registration the Same as FCRA Registration?
No.
FCRA registration is governed by the Foreign Contribution (Regulation) Act,
2010, administered by the Ministry of Home Affairs.
Section 12AB registration is governed by the Income-tax law.
An NGO receiving foreign contribution may therefore need to comply with both
regimes if the respective statutory conditions apply.
Section 12AB Registration Does Not Automatically Make All Income Exempt
Registration is an important condition for claiming exemption, but it does
not mean that every receipt of the institution is automatically tax-free.
The trust or institution must comply with the conditions governing:
application of income;
accumulation;
investments;
donations;
business activities;
audit;
return filing;
registration;
specified violations; and
other applicable provisions.
The institution should therefore maintain proper accounts and documentary
evidence for its activities.
The present provisions contain different requirements for audit and
furnishing of the prescribed audit report.
Where the statutory conditions requiring audit are satisfied, the trust or
institution must obtain the audit report from a chartered accountant in the
prescribed form and furnish it electronically within the prescribed time.
Form 10B is used in specified cases for the audit report relating to
charitable or religious trusts and institutions.
The applicability of Form 10B/Form 10BB should be determined according to
the current law and the nature of the institution's exemption claim.
Therefore, trusts should not continue using the old rule that audit becomes
mandatory merely because income exceeds ₹25,000.
Important Compliance After Registration
After obtaining Section 12AB registration, a charitable institution should
maintain continuing compliance.
Important annual compliance may include:
1. Maintaining proper books of account;
2. Applying income in accordance with Section 11;
3. Maintaining records of donations;
4. Maintaining records of corpus donations and their specific directions;
5. Complying with investment restrictions;
6. Obtaining audit reports where applicable;
7. Filing the income-tax return within the prescribed time;
8. Filing Form 10 where accumulation is claimed, wherever applicable;
9. Maintaining records supporting charitable activities;
10. Complying with TDS provisions where applicable;
11. Complying with GST requirements where applicable;
12. Maintaining FCRA compliance where foreign contribution is received; and
13. Ensuring that activities remain consistent with the registered objects.
Loss or cancellation of registration can have serious tax consequences.
In specified circumstances, the provisions relating to tax on accreted
income may apply.
Section 115TD of the Income-tax Act, 1961 can impose additional income tax
at the maximum marginal rate where specified events occur, including certain
conversion, merger or dissolution situations.
Consequently, a trust should obtain professional advice before:
changing its legal form;
merging with another organisation;
modifying its objects substantially; or
dissolving the institution.
Important Changes from the Old Law
| Old Position | Current Position |
| Registration commonly described under Section 12A/12AA | Registration principally under Section 12AB |
| Form 10A generally described for registration | Form 10A and Form 10AB apply to different categories |
| CIT/DIT(E) terminology commonly used | Principal Commissioner/Commissioner and authorised authorities under current framework |
| Six months from end of month stated generally | For specified applications, six months from end of quarter under amended law |
| Five-year validity often stated generally | 10-year validity available for qualifying smaller institutions, subject to conditions |
| Old ₹25,000 audit threshold | Outdated; current audit provisions must be applied |
| New trust generally described under old 12AA framework | Provisional/regular registration under Section 12AB |
| Section 25 company | Section 8 company under Companies Act, 2013 |
Before filing the application, the NGO/trust/society/Section 8 company
should check:
[ ] Trust deed/MOA/AOA is properly executed and registered where required.
[ ] Objects are genuinely charitable or religious.
[ ] PAN is available.
[ ] Registration certificate from the relevant authority is available.
[ ] Details of trustees/directors/governing body are available.
[ ] Previous accounts are available, where applicable.
[ ] Activity report is prepared.
[ ] Previous registration orders are available, if any.
[ ] Object-modification documents are available, if applicable.
[ ] FCRA certificate is available, if applicable.
[ ] Correct Form 10A or Form 10AB has been identified.
[ ] Supporting documents correspond with the information entered in the
application.
[ ] Application is digitally/electronically verified by the authorised
person.
[ ] Notices issued during processing are answered within the prescribed
time.
Conclusion
Registration under Section 12AB is an important requirement for a charitable
or religious trust or institution seeking exemption under Sections 11 and
12.
The old procedure based on a simple application under Section 12A/12AA and
Form 10A is no longer an adequate description of the law. The present
framework requires the applicant to identify the correct category of
application and use Form 10A or Form 10AB, depending upon the circumstances.
The registration process involves submission of constitutional documents,
registration certificates, accounts and activity details, wherever
applicable. The Principal Commissioner/Commissioner can examine the objects
and genuineness of activities and can call for additional information.
New institutions may obtain provisional registration and must subsequently
apply for regular registration within the applicable statutory period.
Existing institutions must also monitor the validity of their registration
and comply with renewal, modification and other requirements.
Finally, Section 12AB registration does not by itself guarantee tax
exemption. The institution must continue to satisfy the conditions governing
application of income, accounts, audit, return filing, investments and other
statutory requirements.
Important Note on the New Income-tax Act, 2025
The Income-tax Act, 2025 applies from 1 April 2026 for tax years covered by
that legislation. This article principally explains the Section 12AB
framework under the Income-tax Act, 1961, which remains relevant for earlier
assessment years and transitional matters. For transactions and tax years
governed by the new Act, the corresponding provisions of the Income-tax Act,
2025 should be consulted.
Disclaimer: This article is intended for general information and educational
purposes. The appropriate registration form, due date, validity period,
audit requirement and exemption conditions depend upon the nature and status
of the organisation and the relevant tax year. Before filing Form 10A/10AB
or modifying the objects of a registered institution, the organisation
should verify the current statutory provisions, rules and CBDT notifications
applicable on the date of filing.
Income Tax PAN FAQ, Answers & Guidance
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